In New York, if you worked on real property or supplied materials and haven’t been paid, you may be eligible to file a mechanic’s lien. A mechanic’s lien in New York is a tool to help workers, contractors, suppliers, or others who put work into improving real property obtain their unpaid wages or unpaid contract fees. It allows someone to file a lien against the property they worked on for an amount equal to what they’re owed.
A mechanic’s lien may seem appealing if you’re in the trades and have unpaid wages or contracts. You may want to know more information about what is a mechanic’s lien and how does a mechanic’s lien work exactly? Below, the attorneys at TonaLaw explain mechanic’s liens in New York and how they work. However, if you need more information specific to your situation, you should contact an attorney from our office today.
What Is a Mechanic’s Lien?
The first question that unpaid contractors, subcontractors, or workers ask is, what is a mechanic’s lien? A mechanic’s lien is a tool which asserts a debt that is secured by the real property someone worked on, specifically because that person was not paid for the improvements they made to the property. This lien creates an obligation connected to the title of the property. This means it appears on any property record searches about that piece of property and will follow the land no matter who owns the land until it’s paid off for the life of the mechanic’s lien. It is essential to note that there are time frames which must be complied with where a mechanic’s lien must be renewed or a lawsuit must be filed in order to maintain the right of recovery under a mechanic’s lien. Just a single mechanic’s lien filed will not create a lifetime obligation of a property owner to pay the amount owed.
For example, let’s say you are a painter who worked for a subcontractor painting a house. If your employer did not pay you for your work. You can file a case with the New York State Department of Labor or a lawsuit against your employer for unpaid wages. You can also file a mechanic’s lien against the property you worked on because that property was improved by your your unpaid labor. However, in a situation such as this, if the property owner can prove that they paid your employer in full, your employer is solely responsible to reimburse your wages.
Let’s use another example. If you are a subcontractor in charge of installing the plumbing in a home renovation, and you are not paid for the work performed or not paid in full for the work performed, you can file a mechanic’s lien against the property as the plumbing work improved the property. This is essential to collect the amount owed to you as a subcontractor, as you will not have a direct contract with the property owner to file a breach of contract lawsuit against the property owner but will also have no assurance that the general contractor was actually paid, allowing a subcontractor to collect payments owed from all liable parties. This is why the mechanic’s lien is most often used in New York by subcontractors who have not been paid for the work they performed.
How Does a Mechanic’s Lien Work?
Next, you may wonder, how does a mechanic’s lien work? A mechanic’s lien operates the same way as any other property lien in that it attaches directly to the property. If the owner sells the property, the lien stays on the property until someone pays off the lien. However, most buyers do not want to purchase property subject to outstanding liens. This means a property owner will be motivated to clear up any liens to get the property on the market. This provides you with some security, knowing that at the end of the day, someone will have to pay you for your services, whether it be your employer or the property owner if they want to sell their property while the mechanic’s lien is in effect.
How does a mechanic’s lien work if it’s a contractor, not the property owner, who owes you money? Sometimes a property owner does not know that one of their contractors or subcontractors is not paying the workers. Or perhaps they paid a contractor, but the contractor has not paid the suppliers or subcontractors. A mechanic’s lien can create tension between the property owner and contractor or subcontractor, meaning the owner may not offer them additional work until they clear up the lien. Thus, a mechanic’s lien can be a thorn in that relationship that can motivate the person who owes you money to pay their debt to you quickly. Additionally, when a contractor has been paid and has not paid all their suppliers and subcontractors, the mechanic’s lien also helps the subcontractors and suppliers assert the legal obligation a general contractor has to distribute all received funds before collecting any profit on its own behalf.
What Happens If No One Pays the Lien?
The most significant benefit of a mechanic’s lien is that it is a debt secured by a property, the same as a mortgage. If no one pays off a mechanic’s lien, you can file a foreclosure action against the mechanic’s lien. In a foreclosure proceeding, a judge can force the sale of the property to pay your debt should the liability ber high enough.
You may wonder, how does a mechanic’s lien work in the foreclosure context when a contractor or subcontractor owes you the debt? When you file the foreclosure proceeding, you should name the contractor or subcontractor as a co-defendant with the property owner, as well as any other holders of mechanic’s liens on the property.
What’s the Difference Between a Mechanic’s Lien and a Lawsuit?
People who wonder, “what is a mechanic’s lien,” also wonder if it’s similar to filing a lawsuit. It is not. One difference between a lawsuit and a mechanic’s lien is that you don’t have to go through a long process to get a mechanic’s lien. You don’t even have to go to court. If you fulfill New York’s basic requirements for a mechanic’s lien, you can file it with the County Clerk relatively easily.
The property owner can challenge the mechanic’s lien in court once it’s filed. This is why it’s vital that everything you put in your mechanic’s lien is accurate and that you fill out the paperwork correctly. This is why, even though the mechanic’s lien doesn’t involve court right away, you should consider getting help from an attorney for this process.
Additionally, if no one pays the lien, you may want to start a court case to get paid before the mechanic’s lien expires. This means that you’ll have to file a lawsuit to foreclose upon a mechanic’s lien against the property. Foreclosures are complicated. Speak with an attorney if you’re considering foreclosing on a mechanic’s lien. It is important to note that foreclosing on a mechanic’s lien is not the same process as foreclosing a mortgage on a property, so you should discuss this with an experienced attorney who handles mechanic’s liens, not necessarily an attorney whjo handles mortgage foreclosures.
How Can I Get a Mechanic’s Lien?
After learning what is a mechanic’s lien, you may want to know how to file one. First, you’ll need to create a document called a Notice of Lien, which must contain detailed information about the following:
- The property where you did the work properly and legally identified,
- The property owner,
- The contractor or subcontractor who owes you money, and
- The exact amount of money you’re owed.
You should review the specific requirements under New York’s Mechanic’s Lien law. You’ll then get the Notice of Lien notarized and file it with the County Clerk’s office in the county where the property is located, in both Nassau and Suffolk county this filing includes a fee.
How Long Does a Mechanic’s Lien Last?
Generally, a mechanic’s lien lasts for only one year, during that first year, you are entitled to independently file an extension for one additional year. After you have used your initial year and the one extension, you can request an extension with the court. Otherwise, you’ll typically need to bring a foreclosure action which includes a notice of pendency. Speak with an attorney in advance to ensure that your rights are maintained during the time the mechanic’s lien is filed.
Mechanic’s Lien Filing Deadlines
You only have four months from the date you completed your work to file a mechanic’s lien if the property is a single-family dwelling. For other types of property, you have eight months to file. It takes time to prepare, serve and file your mechanic’s liens, so, if you have performed work on a property and have not been paid, do not delay taking action. Often times, missing the deadlines to file a mechanic’s lien makes recovery of the amount owed much more difficult and complex.
Contact TonaLaw for More Information on Mechanic’s Liens
New York lien law is complicated, and you must comply strictly with its requirements to obtain the relief you seek. Plus, there’s a chance you may have to go to court after you’ve filed the lien. The business litigation attorneys at TonaLaw can help with filing and pursuing a mechanic’s lien through collection and any necessary litigation. You need attorneys who can help you navigate the process and fight for what you’re due. If you’re on Long Island, TonaLaw can help. Contact us today.